Single Payment Scheme

Now superseded by Basic Payment Scheme (BPS) since Jan 2015. On 26 June 2003, EU farm ministers adopted a fundamental reform of the Common Agricultural Policy (CAP) and introduced a new Single Payment Scheme (or Single Farm Payment, SPS) for direct subsidy payments to landowners.

The system of subsidy applies throughout the European Union according to rules agreed between the member states. However, exact details of implementation and grants vary from country to country within the outline rules. Transitional rules also apply for new member states which joined the EU in 2004 and more recently. States have a choice of whether to introduce the new scheme at once, or to phase it in over a period from 2005–2013. The UK Government decided to be one of the first countries in Europe to introduce the Single Payment Scheme and decided to start to phase it in from 2005. Introduction in the UK was strategically coordinated via DEFRA, with devolved responsibility to England, Wales, Scotland and Northern Ireland to independently implement the scheme.

The new scheme was intended to change the way the EU supported its farm sector by removing the link between subsidies and production of specific crops. This reform focused on consumers and taxpayers, while giving farmers the freedom to produce what the market wanted. Member States have the choice to maintain a limited link between subsidy and production to avoid abandonment of particular production. Current payments to farmers continue to reflect historic patterns of production for different crops in countries where the scheme has yet to be introduced, or as a proportion of the total payment where the scheme is being introduced over a period of years.

The Single Farm Payment is linked to meeting environmental, public, animal and plant health and animal welfare standards and the need to keep land in good agricultural and environmental condition.

It was an intention of the scheme to 'decouple' grant payments from production. This was in response to criticism from other World Trade Organisation (WTO) countries (mainly the US), that the EU was unfairly subsidising farmers and providing an unfair competitive advantage. Under the SPS the farmer is no longer paid different amounts according to the crop he produces, but a set amount per hectare of agricultural land maintained in cultivatable condition. The intention is that choice of crop is based purely on market driven forces and not on production based grants. Decoupling of payments has allowed them to be categorised under the so-called blue box for the purpose of WTO negotiations, ensuring the legality and compliance of international obligations.

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Wikipedia